2022 (5) TMI 1319 - CESTAT MUMBAI

Classification of goods - Air conditioners with both heating and cooling functions under Custom Tariff - parts of Air Conditioner - admissibility of exemption under Notification No. 85/2004 (Cus) dated 31 August 2004 or Notification No. 46/2011 (Cus) dated 1 June 2011 - whether Air Conditioners need to be assessed on the basis of MRP/ RSP for the purpose of levy of countervailing duty - Confiscation - penalties - HELD THAT:- The impugned goods namely RAC and CMVRF air conditioners are classified under the heading 841501010 and 84159000 as claimed by the appellants while filing the Bill of entry benefit of the exemption notifications as claimed under the Notifications 85/2004 CUS dated 31/08/2004 (S1.No.49), notification no.46/2011-Cus dated 01/06/2011 (SI.No. 1103 (1)) will be admissible to them. Adjudicating authority in para 6.2.4.1, 6.2.4.2 and 6.2.4.3 has after referring to the said notifications opined stating that the benefit of exemption under these notifications is admissible to the all goods classified under heading 8415010 and since he has held that these goods are classifiable under headings 84158110, 84158190, 84158210 i.e. the headings not specified under these exemption notifications, hence benefit of these exemption notification is not admissible to them. Since we have held that the classification of the impugned goods as determined by the adjudicating authority cannot be upheld, and the classification as claimed by the appellants at the time of filing the Bill of Entry is correct classification, benefit of exemption Notification No 85/2004-Cus as claimed by the appellants under heading 84151010 and 84151090 is admissible to them.

Applicability of RSP based assessment for determination of the countervailing duty - HELD THAT:- The demand that arises on the basis of RSP based assessment and determination of countervailing duty needs to be upheld. As the same has not be quantified separately the matter needs to be remanded back to the original authority for re-quantification of the demand on this account.

In the analysis specific references have been made to mis-declarations etc, in respect of the declaration of RSP for the purpose of determination of the countervailing duty. In view of the specific findings recorded for determining the demand on account of mis-declaration/ non-declaration of RSP while determining the countervailing duty we are of the view that extended period of limitation will be invokable as per proviso to section 28 (1)/ Section 28 (4) of the Customs Act, 1962.

The issue of classification of RAC and CMVRF air conditioners, upholding the classification as claimed by the appellants while filing the bill of entry, to be correct - benefit under the exemption notifications as claimed by them under notification No 85/2004-Cus to be admissible to them - the assessment for determination of countervailing duty to be made on the basis of the RSP, and not on the basis of the transaction value as claimed by the appellant.

The matter needs to be remanded back to adjudicating authority for determination and re-quantification of demand accordingly - Appeal allowed by way of remand.